COBRA's a conundrum for many who lose jobs

The federal stimulus package will pay 65 percent of the cost of COBRA health insurance for those being laid off, but it's unclear how big a difference that will make to people in South Florida who've lost their jobs.

Consider Laurita Robinson, a Pembroke Park accounts payable manager who was recently laid off when her company moved its billing operations to New York. She had a family policy, covering her husband and daughter. Under COBRA, such policies usually run $1,000 or more a month.

Even with the government picking up 65 percent of that, "that still leaves me about $350 or so, and that's pretty expensive when you consider unemployment [insurance] isn't that much, " Robinson said.

COBRA has always been that kind of conundrum. The law requires that large companies be required to offer departing workers health insurance for 18 months -- on condition that they pay the full premium. The insurance can be pricey, the law complicated -- a godsend to those with difficult medical situations and a puzzle to many others.

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Robinson hadn't seen her COBRA package yet when she talked to The Miami Herald, and she was unclear on details. She thought she was told that she had to continue with the family coverage she had, rather than just covering herself, but she wasn't sure.

In fact, most COBRA materials from the government say employees can choose how many family members to continue to cover, but it's up to the employer whether she could switch from, say, a regular HMO to a high-deductible plan.

That's just one of the complexities of this special type of insurance. Even the name is a bit mystifying. COBRA stands for the Consolidated Omnibus Reconciliation Act of 1985, which includes a provision about health insurance. The provision was well meaning -- but expensive.

A recent study by the consumer group Families USA found that the average monthly family COBRA premium in Florida was $1,037 for a family, which is more than the average monthly unemployment benefit of $1,013. The average individual policy is $371 -- more than a third of an unemployment check.

The result: Only 9 percent of eligible persons opt for COBRA, according to a study by the Commonwealth Fund.

BILL PASSED

The Obama administration, which is aggressively trying to reduce the number of uninsured Americans, has pushed through a bill to help those involuntarily terminated from Sept. 1, 2008, through Dec. 31, 2009.

Even persons who originally rejected COBRA, or stopped making payments, can qualify for the 65 percent subsidy for up to nine months.

Sandra Foertsch, of South Florida Health Insurance, says COBRA is not right for everyone. Younger, healthier persons might find it cheaper to buy an individual policy. Older patients with ongoing health problems are best sticking to COBRA.

Kris Kraves, a spokeswoman for eHealthInsurance.com, points out that COBRA does not have to be an either-or situation. Some could decide it makes more sense to keep COBRA for themselves, if they have health problems, but put their healthy children on individual policies rather than pay family COBRA.

After 18 months on COBRA, insurers must offer most Floridians conversion policies, which by state law can charge them up to twice as much as a standard policy. This does not apply to persons who worked for self-insured companies, but Foertsch says in those cases she has found they can get coverage under the federal Health Insurance Portability and Accountability Act.

'BIG MISTAKE'

Experts warn that people should avoid a gap in coverage. "The big mistake people make is that they say, 'Well, I'm pretty healthy right now. If I get sick, then I'll get a policy, Craig Thomas of Blue Cross Blue Shield of Florida told The Miami Herald last year. "But that's exactly the wrong thing to do."

Once serious illness strikes, it will often be impossible to buy an individual policy because of preexisting conditions.

All these alternatives are available to those who had coverage while they were working -- and many in South Florida did not. Almost one-third of people under 65 in Miami-Dade and one-fourth in Broward are uninsured, according to Census data.

NO INTEREST

That's why Olga Hedaldo of West Dade didn't show much interest in COBRA last week when a Miami Herald reporter saw her at a Sweetwater unemployment center.

She had worked six years as a certified nursing assistant at a nursing home. She clutched her state license in her hand to show her qualifications, but she had no interest in COBRA because the nursing home didn't offer health coverage.

"No, no, no, no, " she said, sighing.

For more informationGo to www.dol.gov/COBRA -- facts in English and Spanish

For more information on alternatives to COBRA, go to MiamiHerald.com to read "Should you cuddle up with COBRA?"